Values advance on positive data

AFTER A strong close in the US on Monday evening, markets extended their gains across Europe yesterday, as demand increased at a Spanish debt sale, German investor confidence topped forecasts and the International Monetary Fund boosted its global growth outlook.

Positive earning announcements from the US also helped boost markets.

DUBLIN

The big news on the Dublin market was the surge by food stock Glanbia to a four-year high. It closed the day up at € 6, a jump of 3.1 per cent, or 18 cent, but touched higher levels during the day.

Overall, the Irish market enjoyed another positive day, although it did under-perform its European peers.

Particularly strong on the day was paper and packaging firm Smurfit Kappa. It out-performed the index, advancing by 33 cent, or 5.1 per cent to close up at €6.84. As one broker noted, as a "high beta" stock, when the market is up Smurfit tends to move more than the market.

In line with other financials across Europe and the US, Bank of Ireland was also strong on the day, adding almost 1 cent, or 6.5 per cent, to finish the day up at €0.11.

Following the appointment of Tony Smurfit and Stewart Gilliland to its board, C&C enjoyed a bounce, gaining 3 cent, or 0.8 per cent to advance to €3.71.

CRH once more helped drive the market as it added 42 cent, or 2.8 per cent, to climb to € 15.37 on relatively decent volume. However, it did lag its peer group, many of which were up by 4 or 6 per cent on the day.

One stock that failed to advance significantly was Ryanair. It added 4 cent, or 1 per cent, to climb to € 4.32. Dragon Oil gave up some of its gains, retreating by 15 cent, or 2 per cent, to close down at € 7.45.

LONDON

The FTSE 100 closed almost 1.8 per cent up at 5,766.95, led by a rebound in banking stocks.

"Having pushed back to the levels seen at the beginning of April, the question is now whether markets can regain lost ground, or whether the euro zone crisis is strong enough to drag us back downward," said Yusuf Heusen, sales trader at IG Index.

Among financials, Barclays was top of the heap, rallying by 4.6 per cent after a potential earnings upgrade from Bank of America Merrill Lynch.

Market heavyweight Vodafone added nearly 5 points to the blue chip index, with the stock gaining 1.5 per cent as the mobile telecoms operator said it had served the Indian government with a notice of dispute regarding India's proposal to retrospectively tax overseas transactions.

At the other end of the scale, Burberry was the top FTSE 100 loser, tumbling 5.9 per cent on profit-taking after the luxury goods firm met forecasts with an 18 per cent rise in second half sales. Merchant Securities cut its rating for Burberry to "hold" from "buy" on valuation grounds.

Retailer Marks & Spencer was also weak after a trading update, falling 2.5 per cent as underlying fourth-quarter sales missed forecasts, with growth in food sales failing to offset a weaker outcome in general merchandise.

In Europe, stocks rallied the most this year, with banks contributing the most to the Stoxx Europe 600 Index's advance. The Stoxx 600 gained by 2 per cent to 259.45 at the close of trading, the biggest jump since December 20th. The benchmark index is now up by 6.1 per cent this year.

National benchmark indexes also advanced in all of the 18 western European markets. In France, the CAC 40 was up by 2.7 per cent with Germany's DAX enjoying a similar increase.

Banco Popolare, Italy's fifth-largest lender, increased by 9.3 per cent to €1.16. BNP Paribas, France's largest bank, rallied by 6.9 per cent to € 30.99 and Société Générale, the country's second-biggest lender, rose 8.6 per cent to € 18.57.

Greek banks also advanced, amid optimism the government is close to completing its plans to restructure the country's banks.

EFG Eurobank Ergasias surged by 7.3 per cent to €71.9 and Alpha Bank SA climbed by 6.2 per cent to €1.20.

US

In the US, stocks rose as investors bought stocks amid better-than-estimated economic and corporate data.

By midday Apple climbed by 3.1 per cent, snapping a five-day decline, while Coca-Cola, the world's largest soft-drink maker, rallied by 2.6 per cent after reporting earnings that exceeded analysts' projections.

Goldman Sachs swung between gains and losses, as it reported a 23 per cent decline in revenue.

Gary Baker, Bank of America's head of European equity, told investors that the US was a "default" for investors. "If you're concerned about growth, and not sure how concerned you should be, ultimately the US is still your safest haven," he said. - (Additional reporting: Reuters/Bloomberg)